F.J. Bloemen Pty. Limited v. Federal Commissioner of Taxation.

Judges: Stephen J
Mason J
Wilson J

Murphy J
Aickin J

Court:
Full High Court

Judgment date: Judgment handed down 5 June 1981.

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Murphy J.

The correctness of an income tax assessment cannot be challenged except in accordance with Pt. V of the Income Tax Assessment Act 1936 (as amended) (``the Act''). Both the appellants concede this. Part V is a procedural code which impliedly excludes the exercise of any other jurisdiction to examine the correctness of an assessment.

However the appellants contend that a taxpayer may apply to the Supreme Court of New South Wales for declaratory relief in order to go behind what purports to be an income tax assessment to show that it is not in law an assessment because it was not made bona fide or for the purpose for which the assessment power was conferred or was made without due regard to the interests of those affected. In short, they contend that it is open to a taxpayer to show that a purported assessment was not duly made. But, sec. 177(1) (in Pt. IV) provides that:

``The production of a notice of assessment, or of a document... purporting to be a copy of a notice of assessment, shall be conclusive evidence of the due making of the assessment and (except in proceedings on appeal against the assessment) that the amount and all the particulars of the assessment are correct.''

The appellants' contention was that, despite sec. 177(1), production of the notice or copy is not conclusive, but only inconclusive evidence of due making. Ultimately the appellants retreated to the extreme contention that production of the notice or copy was no evidence of due making. Acceptance of the appellants' contention is precluded by the decision in
Re Daniel T. Noonan, Debtor ; Ex parte D.C. of T. (1964) 13 A.T.D. 409 in which this Court (Chief Justice Barwick , Justices Taylor, Windeyer and Owen ) dismissed an appeal from a decision by the Federal Bankruptcy Court (Mr. Justice Clyne ) that an assessment could be challenged only in the manner provided by the income tax legislation. (See also
Batagol v. F.C. of T. (1963) 109 C.L.R. 243 ;
McAndrew v. F.C. of T. (1956) 98 C.L.R. 263 .) Section 177(1) operates so that production of a notice or document purporting to be a copy of a notice of assessment is conclusive evidence of due making and so prevents an enquiry directed to establishing that there has been no assessment. Such production prevents any challenge to the fact, validity or correctness of an assessment, except in proceedings on appeal, when the correctness only of the assessment can be challenged. Part V provides an elaborate scheme (of objections and appeals) for questioning and establishing whether the assessment is excessive.

The appellant Mr. Simons also seeks a declaration that there has been no assessment in his case because the notice was not a definite assessment but tentative only as in Hoffnung's case (
F.C. of T. v. S. Hoffnung & Co. Ltd. (1928) 42 C.L.R. 39 ) because the adjustment sheet accompanying the notice stated ``Your assessment will be reviewed upon determination of the objection against your assessment for 30 June 1977.'' However this aspect does not give the Supreme Court jurisdiction in declaratory proceedings such as these to determine whether there has been an assessment. It has no jurisdiction.

If in an appropriate proceeding an issue should arise whether a purported notice of assessment accompanied by an adjustment sheet containing the statement is a notice of assessment, then the answer should be in the affirmative. The adjustment sheet was not part of the assessment (see Mr. Justice Neasey in
F.C. of T. v. Reynolds 81 ATC 4131 ). The adjustment sheet reference to a review did not destroy the definiteness of the assessment any more than would a statement that the assessment was subject to amendment.

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ATC 4291

The appeals and applications for special leave should be dismissed.